Religious people might name the arrival of a prophet. I might name the abolition of communes in China, or the abolition of slavery, or the defeat of the Nazis. Or perhaps positive innovations such as antibiotics, the Green Revolution, or the invention of cinema/TV.

It would be pretty hard to argue that China opening up to trade with the rest of the world doesn’t belong in the top 10, in any list of the best things that ever happened. Marcus Nunes directed me to this Noah Smith post:

Basically, opening up trade with poor countries such as China can be dangerous. But liberalizing trade with rich countries such as Japan, South Korea and those in Europe has very little potential downside.

The main danger from free trade is the so-called distributional effect. Opening up trade with China put U.S. workers directly in competition with Chinese workers who could do a similar job for much less money. That acted to the advantage of U.S. multinational companies that shifted factories to China, because U.S. companies were the ones with the capital to invest in new Chinese factories. But that hurt U.S. workers who were suddenly out of a job. Many manufacturing industries shifted to China and many laid-off U.S. workers were forced to take low-paying low-skill jobs, while others simply dropped out of the labor force. Trade with China has been great for rich Americans, but it’s been a disaster for much of the working class.

Is Smith suggesting that a policy that produced incredible gains to hundreds of millions of very poor non-white people is undesirable if it generates relatively small costs to a relatively small number of relatively affluent Americans? (Affluent by global standards.) I think so:

I find myself in an odd position right now. Having spent years criticizing the elite consensus in favor of free trade, I now am very reluctant to join the backlash.

One simple reason is that the backlash is being led, in part, by Republican presidential candidate Donald Trump and I’m disinclined to sign onto a movement of which he is a prominent leader.

But just as a stopped clock is right twice a day, there is a possibility that Trump is actually right on this issue.

Now to his credit, Smith goes on to indicate that he supports some recent trade proposals, but only because they would help relatively affluent Americans and relatively affluent Europeans, Asians and Australians. China is not involved. So he’s not as bad as Krugman. Nonetheless, any proposal that would massively improve the welfare of the people who most need economic development seems to be undesirable (in Smith’s view), as it would involve freer trade with very poor people.

Just to be clear, I do not accept the claim that China trade has done enormous damage to America’s working class. Contrary to widespread impression, the recent paper by Autor, Dorn and Hanson does not provide convincing data for a big net loss of jobs because of China trade. The job market did very well during the period they examined (1990-2007), indeed far better than in Germany (which had huge trade surpluses). In my view there has been little or no net loss in jobs in the US due to trade. Losses in some cities and gains in others. In addition, working class Americans (as a whole) have gained enormously from the lower prices resulting from Chinese imports.

But even if I were 100% wrong in my views of the positive effects (on the US) of China trade, I’d view opposition to China trade as morally indefensible. In the comment section, people will tell me that it’s the job of the US government to defend the interests of US citizens, and that we should not care about the welfare of the Chinese. I don’t accept that, and even if I did I’d still argue that China trade benefits the US. But these commenters are people with whom Smith would strongly disagree with on almost any other issue. He should think twice about whether he wants to be associated with people who don’t care at all about the welfare of hundreds of millions of poor Asians. Smith’s a liberal-minded person, and I’m sure he does care about the welfare of people in the third world. My guess is that this is just an oversight on his part.

Another possibility is that I misinterpreted his argument. (Surely the first time that has ever happened in the blogosphere!) I understand that Smith doesn’t explicitly advocate not trading with China, and that his post is forward-looking. But he’s relying on the claim of backward-looking studies (such as ADH) for his assertion that China trade hurt the US. I don’t see how you can rely on those studies, and still claim that your opposition to more China trade is merely forward-looking. Nonetheless if Smith wants to specifically suggest that previous trade with China was a good thing because it helped China develop, but he wants no more liberalization, I’ll amend this post. In that case I’d say his argument makes no sense at all, rather than being morally indefensible. Trump also says that our past trade with China has been a bad thing—at least that argument is consistent.

Nick Bradley, American manufacturers were “de-skilled” when foreign economies reaped the benefits of improved property rights and market pricing. The only way to maintain the real value of U.S. manufacturing would have been to get in the way of foreign labor development (and technological advancement).

BTW— Americans give to the Chinese slips of paper and they give to us real goods and services. This helps the average Chinese? Or does it help a Chinese crony capitalist elite that can invest the slips of paper, often in the United States?

Because I can’t comment at EconLog, it’s here that I’ll comment on your recent post about how “scientific” various disciplines are. There was an earlier paper looking into that, giving us the phrase “Hierarchy of the Sciences“: the idea is that the “harder” the science, the more likely it will be to publish failures to support a hypothesis. Economics and the other social sciences were lower on the scale there (as in they are more likely to publish “positive results”). One possible difference with the paper you referenced is that it focused on experimental economics, which is perhaps still the domain of people curious about results rather than intent on getting something publishable.

Nick, since de-industrialization, the American labor force has become overskilled, not de-skilled. And de-industrialization is a secular trend, not one reliant on temporary currency fluctuations. And managers are workers, too.

And Ben, the Chinese do get some goods and services from us, as well. U.S. dollars enable Chinese to buy lots of things. But you do have a grain of a legitimate point, here.

The concern with free trade is that it hurts a particular segment of the population. It doesn’t hurt them by net job destruction. It hurts them by lowering the market value of their skills.

This is just Stolper Samuelson. Low-skill workers derive most of their income from a factor that is relatively scarce in the US compared to the rest of the world. So if you open up to trade, their real incomes will fall. That is the predicted result of theory.

Nick, You are so wrong it takes my breath away. China opening up to trade might have improved human welfare by more than almost any other single policy change in human history. The effects on the US are utterly trivial by comparison.

How much do you know about China’s history? Do you have any idea how poor China was in 1980? The suffering of the Chinese people back then was almost beyond human comprehension. To deny them the gains from trade would have been one of the most monstrous crimes in all of human history.

You said:

“Pretty sure Chinese laborers lacked the bargaining power to extract all of the surplus:”

Check out a time series diagram of real wages for factory workers in China. (Think near double digit annual gains for decades.)

Everyone, China’s the biggest country in the world, in terms of population. People really ought to find out at least a tiny bit about China before offering opinions on the subject.

Personally, the well-being of rural Chinese matters no less to me than any other stranger from my own country. My own sentiments are pretty universalist, and I tend to agree that freer trade with China has been a net benefit to Americans, including the poorest. That said, Most people aren’t like me, and I’m afraid that forcing them to live by more universalist principles will just engender anger and resentment. A little bit of nationalism is, probably, a good thing, especially for the most ignorant and poor among us. In practice, the alternative to a bit of nationalism isn’t universalism, but rather too much nationalism.

Clarification: I agree with you about the opening of trade with China being one of the best things ever. I was just acknowledging that even one of the best things ever can give rise to some genuine problems.

Umm, because the ADH paper everyone is relying on talked about unemployment, not aggregate wages?

And no, low skilled workers do not necessarily lose when you open up to trade. The vast majority of low skilled workers are in fields like services, and benefit from the low prices at Walmart. No one denies that some workers lose from trade, and from immigration ,and from technological progress, and from changes in consumer tastes, and from lots of other shocks that are part of the market economy.

The auto workers in the US mostly lost out to firms in Germany and Japan paying comparable wages. So it’s not just about wage levels.

So Noah subordinates his economics to his irrational political biases? No surprise. That’s been clear for years. So does 80% or so of the profession. I used to think that you were in the 20% evidence-led, yourself, Scott.

Why listen to glorified political bias tarted up in economic modeling drag?

NGDPLT is a great idea, but you’re impaling yourself on this Trump hobbyhorse.

Re the above, even Mills acknowledged the limits of utilitarianism. Have your rented out a few rooms of your house to Syrian refugees yet? Why not, Scott? It would lead to a net welfare gain, you know.

Excellent Sumner editorializing. Funny, today I was just going to email TC about doing a “Noah Smith” type article before coming here! Great minds think alike…

Many points, here’s mine, with footnotes:

(1) a couple of posts ago I recited the well-known arguments re trade (this is something I read well over a decade ago, so a professional economist like Sumner is aware of it)– no trade at all = bad; unilateral free trade (what the USA does today with China, namely, we don’t have many tariffs even if they do) = good, and, best for everybody is bilateral trade. Game theory says if you threaten a trade war (as Trump does), it will force countries like China from unilateral free trade to bilateral free trade, which is net good for both countries, but only if you don’t shut down trade, which is bad. So Trump’s strategy, as a negotiation tactic, is good. BTW Trump cannot dictate trade policy, it has to go through Congress.

(2) Autor paper was good, it simply said trade with poor countries may reduce certain manufacturing workers incomes, unless there as bilateral trade (so, see my point (1) above), or, perhaps we need assistance to Rust Belt workers to retrain?

(3) Free trade is historically a matter of technology, not politics, long term, see Wolf [A] below on steam ships vs sailing, so to a degree you cannot stop it, long-term.

(5) Autor does make Sumner’s argument (in passing) that helping China is morally good (and I agree), see [B]. However, only if China becomes a democracy IMO, otherwise you’re enabling a repressive country (although the thinking is democracy follows prosperity, citing South Korea).

(6) Unilateral free trade now joins unilateral capital flows as “bad”, see [C]. Martin Wolf in his latest book blasted current account surpluses with the same logic: imbalance is bad.

Excellent blogging by Sumner, as a turkey farmer I know might say…

RL

[A] Martin Wolf: Martin Wolf, “Why GlobalizationWorks”), (p. 117)”from 1820 to 1914, price gaps in commodity markets between continents were cut by 81%, 72% of which was because of cheaper transport and 28% was due to the pre-1870 tariff reductions”.

[B] From the Ator paper: Paul Krugman states this view vividly in his 1997 Journal of Economic Literature article, “If economists ruled the world, there would be no need for a World Trade Organization. The economist’s case for free trade is essentially a unilateral case: a country serves its own interests by pursuing free trade regardless of what other countries may do.” While these results do not at all suggest that international trade is in the aggregate harmful to nations indeed, China’s unprecedented rise from widespread poverty bears testimony to trade’s transformative economic power it …”

I don’t read Noah Smith usually but I thought he was halfways decent. But this is just absurd. Not just in the conclusion but in the simple minded reasoning. This, and what else happens in the blogosphere, incl. the bizarre neoreactionary explosion in the comments section (not just on your blog mind you). It’s as if everyone just picked up a fashionable meme and repeats it mindlessly w/o a shred of logic, reflection, or god forbid, personal experience.

From Harding conflating Africans with savages, to jknarr who thinks renting out room to Syrian refugees is The Big Unthinkable. America can’t take 70,000 while Germany took 1 mio. and another 3 mio.+ sit in Turkey, Jordan, and Lebanon. Back to Europe, where my mom (!) (age 70!) (non ideological!) is renting out to not one but TWO Syrian refugee families. It’s not that hard ye know. Americans can do it too.

Then there’s Nick who doesn’t have the faintest idea what “poor” really means around the world. Or how Shanghai (2016) is different from Shanghai (2006) from Shanghai (1996).

Or take Nick on the terrible “deindustrialization” and “deskilling” of, ugh, the roughly 10% of US workers employed in manufacturing (just a bit more than in farming). So it’s a BAD thing now that out of the $1000 value in an iPhone, the entire manufacturing stays in Taiwan ($200) while a pithy $800 worth of deskilled design and marketing services (boo!!) stay in the US? How much more absurd do people’s opinions have to get? Is everyone gone mad?

Really, the only thing that I learn from blogs these days is your, Scott’s own postings, and a few other blogs such as Econlog and Slatstarcodex. Most other blogs, and nearly all blog comments, aren’t just value-free. They’re a flood of bottomless ignorance hiding behind pointless detail gotten from Google. They’re actively intelligence-destroying.

“What I am saying is that the preponderance of gains went to MNCs, their shareholders, managers, etc”

-How’s that possible, when there are so few people in them, while there are over 700,000 Chinese workers?

“America can’t take 70,000 while Germany took 1 mio. and another 3 mio.+ sit in Turkey, Jordan, and Lebanon.”

-Thanks NATO/Obama/Erdogan!

“incl. the bizarre neoreactionary explosion in the comments section (not just on your blog mind you)”

-Interesting. Is this due to the spread of ideas, people, or both? Or were the ideas always there, but just waiting to be applied to the right circumstances for them?

“From Harding conflating Africans with savages”

-There are a lot of savages in Africa. More so than in any other place on the globe (except maybe South Asia, but your mileage may vary).

“Then there’s Nick who doesn’t have the faintest idea what “poor” really means around the world.”

-He didn’t say that; no need to strawman him. It’s just he believes the mathematically implausible proposition that most of the gains resulting from China’s economic rise did not go to common Chinese. This might be so in wealth, is probably not so in income, and is certainly not the case in consumption.

As I’ve always said, my favorite bloggers are Steve Sailer, Scott Sumner, and Scott the Psychiatrist. Steve and the Psychiatrist Scott both get Trump (though the Psychiatrist Scott supports Clinton, while Steve correctly supports Trump). Sumner, meanwhile, who, before this year, was the blogger I thought most like God, decided to go on and throw a third of his credibility away with his Trump Derangement Syndrome. I was surprised by Sumner’s panicking at something just an inch out of the ordinary.

So, Scott, if wages decrease in America due to competition with China, the cost of living should decrease also, housing, food and gasoline. But the powers that be have a lot of power to manipulate those markets. They are not free markets. So, the squeeze on American workers is on.

But Trump is a liar. First he said US workers get paid too much then paid too little.

I am a liberal for gun rights, but I could never vote for a hater like Trump.

Africa. Well in 7 years I spent living in Africa I haven’t actually seen any savages there. Have you? Have you been in any place in Africa at all? It’s pretty big too, you know. Lest you redefine the term “savage”, and then I’d tell you, lots of lily white savages in the US too. And South Asia? According to you, now India is full of savages? How do I even begin to discuss this? Or why would I try?

You know of course that you’re being smug. That’s the kind of smuggery I can’t stand on Steve Sailer either, no matter how often he’s digging up interesting stuff. He is just using that data to defend his unsavory a priori values. Come to think of it, reading you or Sailer I get the same feeling as reading Chomsky: Interesting observations throughout by a smart person imprisoned in an (to me) absurd world view.

And I believe that Scott (Sumner) “gets” Trump too. But unlike Scott (Slatestar) and Scott (Adams) he doesn’t stop at being beguiled by the demagogic skill. He’s asking, rightfully so, to what good? Mussolini’s, Hitler’s, Goebbels’, Peron’s, demagogic skills were off the charts too, and to quote a meme that impressed Scott (Slatestar) on Trump, they hired plenty of the smartest people too. They even achieved plenty enough ‘successes’ before they crashed and burned. To which I say, give me muddling through ordinary politicking anytime over that kind of trajectory. How did China do it? How did Japan do it? How did Singapore do it? Hey, how did Bismarck’s Germany do it? By smart, technocratic rule, that’s how. Not by populism. If you like populism, look at South America’s record in the 20th Century and weep.

I’ll give you one thing though. Unlike many here, you are not generally confused on facts. You just have different preferences on the outcomes. You want a world where people stay with “their own kind”. And you define “own kind” as a mix of cultural and ethnic factors if I am getting you right. Sadly, to achieve this you must also force your preference on a whole lot of people like me, who don’t want to divide up the world into “my kind” and “not my kind”. I don’t want any of your little containers where people just oughta stay put.

I get the feeling that many commenters come here because they expect some kind of conservative “libertarianism” and end up all in arms because Scott just sticks to classical liberalism. And that just simply isn’t “conservative”.

@mbka – glad you liked my post at least, as I’m not on your hate list. 😉 If you care to, tell us where in Africa you lived. Remember South Africa is not Africa and the average IQ in Africa is around 60, with twenty points being a “big deal” (the USA’s IQ is 100, Greece in the low 90s, the Philippines where I’m now is the low 80s, and in the USA you have the right to institutionalize your child if their IQ is below 80). The cliche of tourists finding the natives like ‘grinning idiots’ has a grain of truth to it, read the comedic works of Dave Barry (who is lol funny, albeit racist in his writings). Childhood nutrition is to blame for low IQ, say experts, not genes. That said, I find some of the most bigoted and mean-spirited people are the ones that claim to have high IQs, like E. Harding and S. Sailer. You will note I have a modest IQ of about 120 and our host Sumner, who married an Asian, claims to have low IQ, so we’re safe.

Nick Bradley:
“What I am saying is that the preponderance of gains went to MNCs, their shareholders, managers, etc

It’s a strong driver of the growth in wealth and income of the global class.”
1) Can you prove that.
1) So what? I get the impression you’d rather poor people starve and big corporations have lower profits than poor people not starve and corporations have much higher profits. You’re not in much of a position to accuse others of being hacks when you sound like a standard vulgar Sandersite who’s thinks the evisceration of the private sector will somehow benefit the ‘working class’, just for cathartic reasons I guess.

And US manufacturing started collapsing well before Paul Vockler. Globalization and the US industrial labor situation left US industrial workers tremendously overpriced. The only way to salvage their jobs would have been to let their wages slide so they could compete with companies abroad. Unions and public officials would not have that though, so a few got to keep their jobs, and the rest became Walmart greeters or jobless. I suppose such a narrative doesn’t allow one to pin it on ‘right wing’ bogey men, but unfortunately the law of supply and demand is not optional.

It is nice that Noah Smith is coming out and admitting that he largely bases his willingness to support or promote a position on which other people support it. Maybe if the Republicans start supporting increasing the minimum wage Smith will decide that one’s icky too and will finally stop deferring to Card Kruger.

It’s also ironic that people who believe that at least half of their fellow citizens are right wing lunatics nonetheless appeal to nationalist sentiment to justify trade restriction. It seems like they should be the first one’s to put universal human welfare above the 300 million strangers we each call our country.

I’m afraid I often don’t read your comments. But this time, I have some strange feeling of agreement, in tone and feeling, with this: That said, I find some of the most bigoted and mean-spirited people are the ones that claim to have high IQs

I absolutely agree here. I believe IQ is sorely overrated as a useful metric and mostly the answer to the wrong question. For starters, exhibit A: Civil rights are not awarded based on IQ (save for very low IQ individuals which can be declared unsound and even this is questionable practice). So any and all “organization of society” claims based in this or that group’s IQ are non sequiturs. It’s an imaginary pecking order.

IQ is also unrealistic as a metric for power in life. Take your ten most preferred brutal/despised/long-lived despots or dictators. Which one’s successes would you attribute to a particularly high IQ? Or in society, are the high IQ ones usually in charge? Do they usually attract more of the opposite sex? Have more kids? Frankly I believe in these examples IQ is not a good predictor for success, or even a negative one. It seems quite unrelated to “what it takes” to succeed. More like a satisficing variable. Good and necessary to have some of it, but with diminishing returns.

Of course the neoreaction implicitly claims that 1. some groups have higher IQ than others, therefore 2. they should be awarded more rights. This ignores exhibit A above. And the liberal opposition to this implicitly accepts ignoring exhibit A too. They just go around claiming that all groups have the same IQ. There is little reason to believe that either. But both are barking up the wrong tree. Exhibit A ruleZ.

Next, IQ is just a tool. It mostly measures who computes better in abstract formalizations. Computers will always win that one for starters. But it says nothing about practical sense. It doesn’t say anything about goals or purpose or morality or anything that pertains to the human. High IQ people can be just as immoral, unethical, misguided, mean, dysfunctional, antisocial etc. as anyone else. Or worse. Which makes them possibly more dangerous than the average person because they have more tools to do damage with. Maybe high IQ people should be monitored as security risks? People worry about unfriendly AI. Maybe we should worry about unfriendly ordinary I first? – Just kidding.

IQ in countries. This issue is a mess and we could go forth and back forever here. I believe the Flynn effect shows that whatever the cause of country wide differences, with increasing development they can shrink quickly. Therefore I am not convinced that causality runs from IQ to wealth in the reported country IQ vs wealth correlation. If you read Flynn’s own book on this, lots of careful discussion here but I don’t expect this to be settled anytime soon in the blogosphere. People usually start with unreasoned beliefs and received wisdoms that they got from life and luck, and then cherry pick evidence for it. The higher IQ ones cherry pick better. That’s all.

Oh yeah Africa. All subsaharan Africa, the ‘poorest of the poor’ kind of nations. Never been to SA in my life.

“I believe the Flynn effect shows that whatever the cause of country wide differences, with increasing development they can shrink quickly.”

-Give one example of this ever occurring.

“Oh yeah Africa. All subsaharan Africa, the ‘poorest of the poor’ kind of nations.”

-Surely there are savages in the interior of Liberia, Sudan, the Central African Republic, the Congo. No electricity, literacy, indoor plumbing, little to no modern medical knowledge, primitive farming tools, no schools, etc.

“High IQ people can be just as immoral, unethical, misguided, mean, dysfunctional, antisocial etc. as anyone else.”

-I know. I’m reminded of the international Jewish mafia. But see pseudoerasmus:

“Small costs.” Relegating American workers to lower value-added tasks to provide those tasks to third world labor so that capital can retain a larger percentage of surplus value is not a moral undertaking, and thus opposing it is not morally indefensible. It is one method to provide those tasks. I’d argue that better governance in those other lands is a better method, and one that doesn’t strip mine the US economy in the process.

The financial bubble due to a subsequent lack of quality investments in the US, the tea party tendency in the GOP, the inability of consumers to earn enough money to increase demand, leading to the possibility of a President Trump… these are not small costs.

I suspect the cost depends on whose ox is being gored. Perhaps it would add clarity if Dr. Sumner and his peers were replaced by a cadre of India-educated economists. I’m sure the new staff would be just as knowledgeable within the field of study, and I’m dead certain that their productivity per dollar wage can’t be matched.

The problem with “free-trade” is that politicians in the wealthier nations assume such agreements are a free-lunch to rearrange their economies to their satisfaction. With “free-trade” all residents of the wealthier nation get the benefit of cheaper goods. At the same time the personal cost of the loss of “dirty industrial jobs” is offset by the personal satisfaction to the “elites” that such jobs have been exported. From the perspective of the “elites” removing smokestacks is a good deal and worth the cost of blue collar jobs. And in politics the elites make the rules, even in America.

The issue is not that “dirty-jobs” are exported. It is that environmental and labor regulations in the wealthy country make it uneconomical for companies to take advantage of surplus labor to start new businesses. There are ample “shovel-ready” jobs in the US. But these projects never launch because government stands in the way. So the consequence of “free-trade” in a hyper-regulated economy is the blue collar economy withers away and with it economic opportunity for the lower class.

Ray + MBKA, very enjoyable posts. Ray, I like point #1 and #6. Complicated issue this free trade stuff and large account surpluses and tariffs. I am glad to see that most people in America have such certain and defined opinions about such a complicated topic.

Dear God! What would I do without mbka? Has everyone else consumed some sort of kool-aid that makes them forget why free trade raises living standards? Is no one aware of what’s happened in China in the past 35 years?

I fell asleep at the end of the 1990s, and woke up in a stupid world.

It’s like some guy is crying because he got a tiny pinprick, and right down the street 100 men lost their arms in an industrial accident. It’s the moral equivalent of innumeracy.

Harding, back to your usual soul-destroying mess. Your definition of savages is telling. Describes a lot of mid 20th Century rural Europe, probably America too. You’re a relic. Have you ever opened an ethnography or anthropology book written after 1945? It’s like the entire 20th Century never happened in your mind. You’re just picking up any convenient current factoid to decorate your stale old worldview.

Just quickly on the Flynn effect, country IQ generally rises over time. That is the Flynn effect. Flynn himself attributes it to the formal nature of the IQ test. Also, development comes with STEM and with generally more symbol usage, in other words, formalization. And understanding abstract symbols leads to higher IQ scores. Whether this leads to generally “smarter” people is debated / debatable. But it certainly leads to people better adapted to high STEM worlds. The Flynn effect is also linked to economic development. There are therefore many, many examples of rising IQ with rising wealth. Most telling are those where the original populations were different in IQ although arguably similar in ethnicity. East / West Germany is an example of convergence, lower in the East at first (by up to 10 points in the 1960s), then converging with the West.

And frankly, whenever I think of the nastiest dictators or typical politicians, top IQ does NOT come to mind. For politicians I presume generally high IQs though not society’s tops. Their real selling point is not their own IQ, it’s the combo of enough IQ and enough flexibility to use the IQs of other people well. That’s something that top IQ people rarely bother doing in their intellectual arrogance.

I agree with Noah in the sense that the distributional effects are largely ignored in free trade debates and so maybe something could be done to soften the blow. But you’re absolutely right that trade with China isnt dangerous rather it has helped immensely to some of the poorest people in this world. In his article, Noah is too U.S centric.

Should Americans be giving away massive amounts of money to savage Africans?

What are you talking about? Foreign aid sums to just north of $30 bn, and a good deal of it is security assistance done for reasons of state. Another batch funds development banks, which may be bad investments, but their business is not relief.

While we’re at it, homicide rates in Tropical and Southern Africa tend to be lower than they are in Latin America. Literacy rates tend to be around 60%. Life expectancy at birth tends to be around 57 years. It’s typical for about 1/3 of value added in their economies to be found either in agriculture or extractive industries, not more. Real income levels are low, but to the extent you can make inter-generational comparisons, they’re characteristic of early 19th century Europe. The Congo, the Sudan, and Somalia have been a godawful mess in recent decades, not other places. About 2/3 of the states therein sport electoral politics with a certain threshold of political pluralism. Just why would one call Africans ‘savage’?

-Free trade is probably a marginal issue (except in the early years) given China’s rapid development of an internal market. Look at Mexico’s economic history for confirmation of this.

“Is no one aware of what’s happened in China in the past 35 years?”

-I am!

Free trade in manufacturing may have raised average U.S. real wages, though I doubt it, due to the pressure on resource costs and incentivization of inequality.

mbka, I knew you’d use the East German case. In any case, it’s dubious. Serbia and Romania’s PISA scores aren’t hugely different from Greece’s and Cyprus’s, suggesting small IQ differences. In the German cases, the sample sizes were too small to conclude anything. The only example of international test score convergence (not even necessarily IQ) I can think of is South Korea on the OECD adult skills survey, and even then Korean baby boomers had higher numeracy and literacy test scores than Spanish and Italian baby boomers. Though Spain and Italy had a lot of post-war convergence, too.

-Like a few million people in South and Central Europe and Blacks in the Southern U.S. Maybe Albania and other suchlike countries, but they were quickly brought out of savagery by the Communists.

“You’re a relic. Have you ever opened an ethnography or anthropology book written after 1945? It’s like the entire 20th Century never happened in your mind. You’re just picking up any convenient current factoid to decorate your stale old worldview.”

-Relatively little psychometric data was created before 1945, especially international. I’m now reading 19th century books to see if the ethnic stereotypes of today held true back then (for Chinese and Japanese, mostly yes). They certainly had a more sensible view of things back then. Better writing style, too.

“And frankly, whenever I think of the nastiest dictators or typical politicians, top IQ does NOT come to mind. For politicians I presume generally high IQs though not society’s tops. Their real selling point is not their own IQ, it’s the combo of enough IQ and enough flexibility to use the IQs of other people well.”

-Agree.

“That’s something that top IQ people rarely bother doing in their intellectual arrogance.”

It would be pretty hard to argue that China opening up to trade with the rest of the world doesn’t belong in the top 10, in any list of the best things that ever happened.

I would think that the end of the abattoir state in China around about 1972 would count for that. Economic development in China generally (which incorporated measures of liberalization would count for that) might count for that. Why would one offer that ‘trade’ would be a phenomenon of that import. China has an enormous domestic market, so development processes will be less sensitive to the trade regime than they might otherwise. As for the benefits to the rest of the world, gains from trade with China are what share of incomes in loci outside China? Low single digits, I expect.

I’d view opposition to China trade as morally indefensible.

Whatever. Just out of curiosity, who ‘opposes’ ‘trade with China’? You’ve had some complaints about the Trans Pacific Partnership (the contents of which were kept secret), some complaints (from Trump in particular) that our trade negotiators are incompetent, and some complaints (from Mitt Romney) about currency manipulation. How is that tranmogrified in your mind to a preference for a trade embargo on China?

@mbka – I’m afraid we are in violent agreement on IQ. The new book to read on this topic (it’s on my Kindle) is this one: Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own – by Garett Jones. Not to agree with it, but to pick holes in the logic. Re Africa, I almost moved to Zimbabwe to find a mate. But I figured my chances were better in the Philippines. And I figured it would be slightly more kosher with my kinfolk (I’m Caucasian). BTW the Chinese come from Sub-Saharan Africa, from (it is said) the Xhosa, who from Google Images seem to have Asian eyes, so that proves it.

Has everyone else consumed some sort of kool-aid that makes them forget why free trade raises living standards?

No, but the question does arise as to how important trade is in influencing static welfare and economic dynamism. Bela Belassa was a vigorous defender of liberal trade regimes. IIRC, his published research did indicate that the welfare gains were generally contextually small.

-That was a hypothetical, Art. A “should” question. Learn to deal with them.

I’d suggest you learn not to be supercilious prick, but I don’t think that’s happening.

-CAF? Also, ebola-ridden countries (especially the interiors).

The Central African Republic is a small country just adjacent to the Congo. You could also add Equatorial Guinea to the list for a different set of reasons. Doesn’t change the general picture. The most recent Ebola outbreaks were in coastal countries, and they’ve been suppressed for now. Ebola is not a big contributor to mortality in Africa.

Your understanding of IQ and neoreaction are highly flawed. IQ has been studied quite a bit and we know it is an accurate predictor of a range of life outcomes and does not exhibit racial or cultural bias in this respect.

Whether high IQ predicts becoming a global tyrant is a bizarre question that we do not have the information to answer and that as far as I can tell is of no import whatsoever. Your conclusion that computers have higher IQ than people is also bizarre and meaningless.

Your complaint seems to be that IQ does not really matter but you do not explain why you disagree with the thousands of studies corroborating the importance of IQ in life outcomes.

Regarding neoreactionaries, you argue that they think higher IQ people should have more rights but I have never seen that argued for anywhere. My understanding of neoreaction is that they believe a return to traditional values will benefit everyone.

For the record, I think you are completely right about this one. Trade between North America and East Asia (Japan, Korea, Taiwan, and, of course, China) was a huge net plus to humanity.

My feeling is that a lot of the recent criticism stems from cognitive illusions. The fact that many got obscenely rich thanks to the Chinese emergence as an industrial powerhouse can make us forget that so many people have risen out of object poverty in the past 35 years.

Likewise, we seem very bad at comparing the quality of life of the working class now and before. For example, since the 1970s, the typical American goes out to the restaurant three times more often! Household size has decreased by about 25% since 1960, while new house sizes have increased by 50%! And the number of vehicles per household has almost doubled! And we could go on and on.

“I’d suggest you learn not to be supercilious prick, but I don’t think that’s happening.”

-Whatever.

“The most recent Ebola outbreaks were in coastal countries, and they’ve been suppressed for now.”

-Yeah, but they began in the interiors of those coastal countries.

Now, on to mbka’s first (and best) comment:

“we agree on some facts but differ wildly on their interpretations.”

-Yes, this is true.

A”frica. Well in 7 years I spent living in Africa I haven’t actually seen any savages there.”

-In which countries have you been? Burundi? Guinea-Bissau? DRC? CAF? Sierra Leone? Did you go any place outside the major cities?

“Have you?”

-No; why would I do that? I’d rather visit somewhere civilized like Israel or Japan.

“Have you been in any place in Africa at all?”

-Nope.

“It’s pretty big too, you know.”

-Yes; I know.

“Lest you redefine the term “savage”, and then I’d tell you, lots of lily white savages in the US too.”

-Where? West Virginia and Kentucky have a lot of people living on welfare, but they’re almost all literate, have a reasonable life expectancy, and virtually none work in occupations that suggest savagery.

“And South Asia? According to you, now India is full of savages? How do I even begin to discuss this? Or why would I try?”

-I wrote “but your mileage may vary”. India has millions of people who defecate on the streets, transport livestock around the cities and villages, are generally dirty, occupy themselves primitive agriculture, have no running water and barely any access to electricity, etc. They’re about as close to savages as you may see in the modern world outside of Austrialia, the Amazon, and Sub-Saharan Africa.

“You know of course that you’re being smug.”

-Not really, but your mileage may vary.

“That’s the kind of smuggery I can’t stand on Steve Sailer either, no matter how often he’s digging up interesting stuff. He is just using that data to defend his unsavory a priori values. Come to think of it, reading you or Sailer I get the same feeling as reading Chomsky: Interesting observations throughout by a smart person imprisoned in an (to me) absurd world view.”

-That’s an interesting way to put it; I’ve never thought of or heard anyone comparing Sailer and Chomsky before.

“But unlike Scott (Slatestar) and Scott (Adams) he doesn’t stop at being beguiled by the demagogic skill. He’s asking, rightfully so, to what good? Mussolini’s, Hitler’s, Goebbels’, Peron’s, demagogic skills were off the charts too, and to quote a meme that impressed Scott (Slatestar) on Trump, they hired plenty of the smartest people too. They even achieved plenty enough ‘successes’ before they crashed and burned.”

-Good point, but you’re really steelmanning Sumner here. There’s nothing really good about Trump- except that he doesn’t want Citizens United repealed or a $15 minimum wage, has a keen understanding of great power politics, is more capable of winning than a traditional conservative, hasn’t said he wants to rip up the Iran deal on Day 1, hasn’t said he wants to “punch Russia in the nose” or build up America’s capability to cyberattack China, and has not (as of yet) denied having committed a traffic offense he was ticketed for while calling the police officer who ticketed him “an idiot”. In short, he’s the worst of all possible candidates, except all the others.

“To which I say, give me muddling through ordinary politicking anytime over that kind of trajectory. How did China do it? How did Japan do it? How did Singapore do it? Hey, how did Bismarck’s Germany do it? By smart, technocratic rule, that’s how. Not by populism. If you like populism, look at South America’s record in the 20th Century and weep.”

-Hillary Clinton and John Kasich are the closest things that come to technocrats these days, and their preferred foreign policy is a disaster waiting to happen. Especially Kasich’s desire to allow Turkey to enter the E.U. (I’d much rather it be nuked) and both Clinton’s and Kasich’s strong Sino- and Russo-phobia. Clinton’s preferred immigration policy will also doom the country towards electing a lot more Latin American-style politicians.

The principles you’ve laid out are good, but do not apply here. Sensible technocracy is better than populism, but populism in the style of Trump is way better than the present establishment (populism in the style of Sanders is a bit worse).

“I’ll give you one thing though. Unlike many here, you are not generally confused on facts.”

-Thanks. I try to keep myself well-informed by reading a diversity of perspectives.

“You just have different preferences on the outcomes.”

-Yes.

“You want a world where people stay with “their own kind”.”

-That would be better than the current situation in Germany, but that’s not really the policy I consider optimal. I prefer nations not be ruined. Thus, I prefer some kind of state-guided eugenics to remedy many of the problems of the present situation. I come from a recent immigrant background; I like racial diversity. But diversity can only work when the diverse don’t subvert the order that the natives created, as most Jews and Asians seem wont to do- or, worse, establish a new, much inferior one, as the Arabs of Europe seem to be starting to do. Diversity is also liable to be exploited by advocates of dangerous factitious identity politics, who seek to make all an enemy of all. This is my biggest problem with it as a concept.

“And you define “own kind” as a mix of cultural and ethnic factors if I am getting you right.”

-To a large extent. The closest thing to a nation based on IQ that has ever existed has been Ashkenazi Jews. And they helped build a much better nation in the Middle East than most of them prefer to help create in their own home countries.

“Sadly, to achieve this you must also force your preference on a whole lot of people like me, who don’t want to divide up the world into “my kind” and “not my kind”. I don’t want any of your little containers where people just oughta stay put.”

-Public policy is almost always policy on the use of force. And I really don’t think people just oughta stay put in all cases.

Not much indication of that at this point. What polling’s been done indicates that Kasich has been the most palatable to the general public in hypothetical matches, followed by Rubio, followed by Cruz, followed by Trump. Kasich and Rubio will sell the Republican base down the river on the immigration question. Cruz is much more predictable than Trump regarding dispositions on policy and may have a few cards up his sleeve to break the federal judiciary.

And they helped build a much better nation in the Middle East than most of them prefer to help create in their own home countries.

What are you talking about? Jews are a tiny minority everywhere in the world other than Israel and the United States. The Jewish population doesn’t have the capacity to make the world worse anywhere outside of New York and Los Angeles even if they cared to do that.

Art Deco, you forget Moscow. And Jews are a very powerful minority in the United States relative to their population size. They punch above their weight.

Art Deco, have you been reading the Audacious Epigone’s posts on polls and Trump? They do show Trump has greater crossover appeal. Kasich is a moderate Republican who can also win (if he defends himself well enough and attacks well enough). And if Cruz can gain five percentage points of the vote more in Texas, that does not translate to him winning Ohio or the slippery small swing states.

BTW, it seems that nationwide general election appeal as measured in the polls right now is inversely correlated with media coverage, as well as nationwide poll numbers among Republicans. That tells us something, but it’s not too kind to those general election appeal polls’ usefulness.

I have worked on moving manufacturing from the US to China. The benefits are lower wages. Plus lower medical care taxes and payments. Plus lower or absent social security payments. Plus longer hours with no kickback. No unions to define jobs in ways that reduce productivity. Plus no administrative costs for workers’ rights or diversity training. Plus, less insurance for disability and injury. Plus, much less cost of meeting land use, pollution, and other regulatory burdens, plus much less time and legal fees in setting up and operating. So, it is not just about wages. It is about the whole US legal and regulatory infrastructure that is deemed “just” and “necessary” for US workers and unnecessary for Chinese workers. So, when you buy that cheap jacket or desk at Wal-Mart, you are buying release from the whole structure of law and regulation deemed “necessary” here in the US. High hypocrisy.

American jews are less favorably disposed towards Zionism/Israel than the American gentile public writ large:

Midge Decter has 11 grandchildren; three of her four children have lived in Israel for a time, one settled there permanently, and the widower of another owns property there; only one of her four children intermarried. Few Jewish grandmothers have that kind of legacy. The archetypal contemporary of Midge Decter had two kids, of whom one intermarried; she has three grandchildren, of whom one might qualify as Jewish halakhically or in any way with more force and meaning than having an heirloom locked away in a jewelry box.

Critics of ‘J-Street’ have maintained that it’s sorosphere astroturf, an Obama fan club manned by Jews with very tenuous connections to the Jewish society as a whole. The thing is, intermarriage rates are so high now and religious observance so unstructured and infrequent that the sort of “Jews” who man the likes of J-Street are likely more representative than Clan Podhoretz.

You have religious Jews, who have an ample number of children and do not intermarry. They’re a 10% minority in the U.S. (though a majority in Britain). The thing is, some have theological objections to Zionism and others are skeptical of the what they regard as secular substitutes for Judaism. (Rabbi Hillel Levine offered some decades ago that it was maddening that some obscure idiot makes rude remarks over the radio and the Jewish community leadership finds that motivating; that hundreds of thousands of Jews intermarry and do not say their prayers motivates the Jewish community leadership not at all).

Recall the Tom Wolfe character who’d imbibed liberalism with his apple juice and his father’s smiles in the evening and with the law school education in which it was bad taste to be anything but a liberal. I don’t think Israel will get more than diddly/squat out of American Jewry anymore (or, more precisely, what’s left of American Jewry). The communal reaction to the betrayal authored by the BO administration demonstrates that.

Scott,
I’m only commenting to give some voice to the silent majority of your readers who understand the things you are saying to be self-evident. I have a lot of the same lefty instincts that someone like Smith does (seriously, not only am I a Returned Peace Corps Volunteer, but I’m also the captain of my ultimate frisbee team) and I don’t understand from where Smith is coming. It seems odd that a national lefty movement that would rally around Occupy movements and 99% slogans would not be more in favor of trade. I don’t understand how someone can be an Occupier domestically and a protectionist globally. Does human dignity stop at the borders on a map?
So yeah, I’ll join you in the head scratching. Do we not understand what his point was?

One of the contextually largest Jewish communities in the world is in Britain. I amounts to 0.5% of the British population – in a matrix wherein the chatterati are thoughtlessly, guiltlessly, and viciously anti-semitic. When your weight is minimal, thrice your weight is still minimal.

“It seems odd that a national lefty movement that would rally around Occupy movements and 99% slogans would not be more in favor of trade. I don’t understand how someone can be an Occupier domestically and a protectionist globally. Does human dignity stop at the borders on a map”
Well-said ChacoKevky. If it is true, as us often argued by the Occupy type people (well, at least among the view who are literate enough to make the argument), that big monopolist corporations are reaping all the gains, then protectionism will only cause American companies to raise prices without raising wages, and keeping the gains as profit.

It’s fascinating that, even among many economists, one’s belief in whether an industry is competitive or monopolist, whether a labor market is a monopsony, switches back and forth depending on which ‘issue’ you’re discussing, like something analogous to Heisenberg’s uncertainty principle.

By Smith’s ignorant illogic, governments of relatively poorer US states should not allow any of their citizens to trade with relatively more affluent US states. And even within a state, mayors of relatively poorer US cities should ban trade with relatively more affluent cities. And neighborhoods.

The “distribution effect” Smith is promoting here is based on the fallacy that economics is a zero sum game. David Ricardo long ago wrote on the law of comparative advantage. Smith might want to catch up to 19th century economics, before he dabbled in contemporary topics. What a fool.

“By Smith’s ignorant illogic, governments of relatively poorer US states should not allow any of their citizens to trade with relatively more affluent US states. And even within a state, mayors of relatively poorer US cities should ban trade with relatively more affluent cities. And neighborhoods.”
Don’t give him any ideas.

New: we have learned that Harding is a recent immigrant. Presumably he moved from a more savage place to a less savage place. He favors immigration and diversity, as long as it’s the immigration and diversity of himself. Others who may wish to come after him, especially with a different background, may not apply. Now that Harding is in, please shut the borders. Also, every time he goes camping, he turns into a savage for a week because he doesn’t have access to indoors plumbing.

Not new: Harding quotes his IQ for the umpteenth time on this blog. He believes IQ is very important. Harding believes that IQ and being Jewish / not being Jewish are the most important variables to explain the world as it is. Why travel to find out more? No need – Harding already knows everything worth knowing about it.

On Cliff.

I won’t wade into the IQ quagmire, this won’t be solved quickly nor are there clear answers from the factual, and even less the normative.

I note with interest that Ray agrees here.

Cliff again, My understanding of neoreaction is that they believe a return to traditional values will benefit everyone. Whose traditional values? Confucian? Zoroastran? Puritan? Antebellum US South? Jesuit? Wodaabe? English monarchic? French Republican? And who are the ones supposed to return to them? Americans? Senegalese? Laotians? And if you stick to a single place for argument’s sake, who decides on the values to “return” to? Will everyone living in a place have to “return” to the same values? Whether they want it or not? Like, in the Cultural Revolution in China? Inquiring mind wants to know.

Not even close. Several film studios and broadcast networks were founded by Jews or by partnerships within which Jews were prominent. These are now publicly-traded corporations or subsidiaries of them. CBS, the New York Times Company, and Amazon are the bulge bracket media companies with Jewish leadership. The Sulzbergers were always tedious liberal assimilationists and they’re in any case in hock to Carlos Slim.

Jews contribute over half the funds the Democrats get, slightly lower percentage for the Repubs.

Which Stormfront website did you troll for that little datum?

The last three Fed chairs have been Jewish, you think that’s a statistical coincidence?

Yeah, and the seven preceding them were gentiles. You fancy there was some sort of Jew coup in 1987? You’ve got 14 cabinet secretaries, five A-list positions in the Executive Office, and about a dozen free-standing agencies with large budgets. About five of these 30-odd positions are occupied by Jews. You think they’ve Jedi-mind tricked the rest of these 30-odd officials?

Nick Bradley, sorry I missed your response from 16:47. Volcker, and the trade weighted dollar in general, are not strong causal factors for the decline of manufacturing employment. This is a chart of domestic manufacturing employment and the dollar strength: https://research.stlouisfed.org/fred2/graph/?g=3Rdv.

Again, the value of low productivity U.S. manufacturing declined when other nations pulled back on screwing their citizens. That is a value shift in real terms. We could have inhibited that process with protectionist measures, but why not step out of the way and simply explicitly subsidize affected populations? It seems more perverse to impede foreign development in order to trap domestic workers in low value jobs as a roundabout way to avoid openly providing social insurance.

Count,
I think you attribute too much of Jews success to some form of conspiracy. Simple fact is that average white people are just dumb. Like car forever stuck up on cinder blocks on the front lawn dumb. Thank God for the Jews, Indians, and Asians or America would be on its way to 3rd world status. Props to the Latinos for their strong christian family values.

Seems rather silly to me. Even Archie Bunker was willing to call Dr. Shapiro when he needed care. Primary variable for determining a medical assistant should be competence (unless time is of the essence -then I guess proximity of care might be primary variable). If calculation is being based on extraneous variables such as accent, then you prove my point about dumb white people.

“Relatively little psychometric data was created before 1945, especially international. I’m now reading 19th century books to see if the ethnic stereotypes of today held true back then (for Chinese and Japanese, mostly yes).”– E. Harding
I doubt most people in the West in the 1800s would have put Asians ahead of Southern Europeans. During the Japanese rebellion in the middle 1940s, a Brazilian governor told the rebels they should be grateful for being ruled by a superior race (i.e. White Brazilians, mostly Portuguese stock). I doubt he would have dared speak this way to the descendents of Confederates soldiers who immigrated to Brazil’s Southeast or for the Germans and Italians who immigrated to Brazil’s South and other (relatively) cold places. Not to mention America’s own Asian Exclusion Act.

or fools like Art Deco worry about only when white veterans want white doctors.

I actually gave you the quantitative data on the senior officialdom in the administration, which you ignored. It’s not going to surprise anyone that a political party which draws its cadres from the legal profession has an ample supply of Jews in senior positions. Given that this administration is Eurotrash hostile to Israel, you can see how much weight Dr. Yellen, Miss Pritziker, and Messrs. Lew and Froman have been willing to throw around.

If you think AIPAC is the most influential lobby in the United States, I’m not the fool here.

Primary variable for determining a medical assistant should be competence

And you determine your doctor is ‘competent’ just how? You’ve got three methods: check his certifications, ask around about him, or ask yourself if he’s perpetrated any disasters. Beyond that, physicians and surgeons are not interchangeable. Some of them are conscientious and some of them aren’t, some of them have rapport with you and some do not. It does not surprise me that the manners of Indian doctors grate on these veterans (my suspicion re the Chinese doctors would be that language barriers were the problem). Of course, there’s no shortage of asshole doctors in this world, of whatever cultural background. As for asshole economists, there’s a nest of them on the GMU faculty.

In a vacuum where the Fed is pursuing optimal monetary policy and other countries behave fairly, I might agree on trade. Unfortunately, “free trade” has not been free because we do not get the same access to other markets as they get to ours.

Also, I think that the calculus on free trade works in world where inflation in much higher in the U.S. Unfortunately, bad monetary policy has meant that the U.S. imports too much unemployment.

The goal of encouraging world living standards to rise is laudable. But, in the long term, world living standards should be rising for the correct reason: They adopt free market principles, the rule of law, and democracy.

“Free Trade” is not really free when the deal is one-sided. Both Sanders and Trump supporters are sending the same anti-trade message. I do not think that it is anti-free trade necessarily; I think it is more that the agreements themselves are bad, and are less “free” trade and more “unfair” trade since developing countries still protect their own industries. I also do not think that we can afford twin deficits forever, and afford to import the world’s unemployment forever. So long as inflation was high, free trade was a moderating force. When inflation is too low as it is now, it is a destabilizing force.

“We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars—fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability—and stability—we may have taken for granted.”

In support of Andy Grove’s argument here is a thought. For those who believe government can serve a benevolent function (which I believe is most people save the hard libertarians) there should be room for government “investment” in manufacturing. And this investment would likely be made via tax incentives that would encroach on the purity of “free-trade”.

One such example is Boeing and its demands for the Ex-Im bank. If Boeing receives taxpayer subsidies to sell its planes it follows that Boeing should be expected to “invest” in American jobs. If instead Boeing outsources an increasing number of components to foreign manufacturers taxpayers ought to consider what exactly they are getting for their subsidy.

‘Today, governments are trying to get inflation higher, not lower. But QE and deficit spending to date have yet to accomplish that. Would helicopter money? Mr. Clarida, who is also an adviser to bond manager Pacific Investment Management Co., says to have the desired effect central banks and governments must coordinate at the outset. Rather than commit, as the Fed has done, to eventually get rid of its bonds, it must promise to hold them forever. “If markets expect the new debt to be sold into the market in the future, that would depress consumption as households and firms expect a future tax increase.” Moreover, he notes, the Fed must not pay interest on the reserves it creates when it buys the debt, as that would negate the fiscal benefits.’

why is manufacturing special as an industry? People used to have a fetish for farming, presumably because it is connected to food, and we have an emotional connection to that. But why has manufacturing now taken the top of the most mythically desirable ways of making money? Why has manufacturing become the new fetish? Why is it so desirable to solder resistors to a PCB or to risk one’s fingers in sheet metal cutting? Why is it so much worse, in the public’s mind, to make 2x or 4x or 8x the hourly wage of manufacturing by designing websites or selling financial services? Why? Because hardly anyone in America actually knows anyone doing this kind of job maybe?

I think what is special is the knowledge of how to make things and to be able to continually advance that knowledge. The repetitive manufacturing of a widget (or tennis show) is nothing special and is a job that should be exported or automated.

What Andy Grove was writing about is advanced manufacturing. Brookings as a piece on the subject here: brookings.edu/research/reports2/2015/02/03-advanced-industries/

Were they brought out of poverty by trade or by technological adaptations and process improvements? Would they have been left in poverty had someone in Washington been more aggressive negotiating trade deals? Would they have been left in poverty were there a wall along the Rio Grande?

I’m fine with putting “China opening up to trade with the rest of the world” high on the list, maybe even the top 10 – though I’d prefer it be more general, like “The global trade agreements opening free trade.”

By the way, do you distinguish at all between revenue tariffs and protective tariffs? It’s obvious to me that protective tariffs are bad, but I’m not sure about revenue tariffs, assuming you need to collect revenue somehow. In other words, is a 10% or below tariff any more economically damaging than an equivalent amount of revenue from say, the corporate profits tax?

My vote for the number one item on the “greatest thing ever” list should be the founding of America. (Including the Revolution, and the ratification of the Constitution, etc.)

@ssumner
Just to be clear, I do not accept the claim that China trade has done enormous damage to America’s working class.

Maybe it’s mostly wage stagnation that hit them hard.

And do Autor, Dorn and Hanson really say that it was a net job loss? Or do they say that Americans who lost their job because of China found new jobs eventually but those new jobs weren’t as good as the old ones? Which makes sense because when you worked in an industry for 25-35 years and this industry goes down, you most likely can’t just start fresh in a pretty different industry and get paid the same.

But just as a stopped clock is right twice a day, there is a possibility that Trump is actually right on this issue.

I also think Trump is partly right on this issue. Especially trade deals with China can be really weird. When they buy things like planes it’s possible they only buy them when you produce them in their country. The same goes for cars.

I know a few important people at Mercedes-Benz. Not so long ago it wasn’t really possible to export whole cars into China. It was possible on paper but in reality the Chinese government did everything to prevent imports like this. Nearly all imports are close to impossible if you don’t produce in China or are in a joint venture with a Chinese company. I assume that is still true until today.

So what Mercedes-Benz had to do was the following: They assembled cars like the S-Class in Germany, disassembled them right away, shipped them over to China, and reassembled them there again.

For all small cars it’s even harsher: You can only sell them in China when you produce them there. So pretty much all the German car companies produce their cars for the Asian market in China now.

Their are quite a few things like this happening. For example the Chinese government often forces foreign companies to transfer proprietary technologies to Chinese competitors as a condition of entry into the Chinese market.

It’s also hardly possible to buy more than 50% of a Chinese company until today.

Is this true the other way round? I don’t think so. China does not have to produce or assemble their products in Europe to sell them here. China does not have to transfer proprietary technologies to European competitors. And China can buy nearly every European company they want to.

Trump is not against free trade at all. But he wants to negotiate new and fairer deals with China. It’s not clear why this would be such a bad thing for America.

“That’s because Southern Europeans discovered Japan, not visa versa. Accident of history.”
It happened because our forefathers were braving the unknown, discovering new lands, unveiling entire continents, mastering the arts of trade and war, creating new empires, carrying out their mission — “to teach the ways of peace to those you conquer, to spare defeated peoples, tame the proud” while the Asians were stagnating. Usually, the “accidents of history” the promoters of HDB think are illustrative of their favorite racial hierarchies are even less meaningful. Also, the Founders never intended Asians to be citizens.

@mbka
How did China do it? How did Japan do it? How did Singapore do it? Hey, how did Bismarck’s Germany do it?

I agree that classical liberalism is a nice ideology. I like its ideas. But pretty much all the examples you gave here aren’t really good examples for classic liberal leadership.

There’s are at least two other important flaws in the history of classical liberalism. Classical liberals did not really fight the Great Depression fast and effectively enough.

They also did not fight Hitler fast and effectively enough. Three other people did: A conservative egocentric, a left-wing authoritarian populist and a left-wing paranoid psychopathic mass murderer.

So you could conclude that classical liberalism is a really nice ideology but only during really save times. It’s not the best ideology in times of deep crisis and when you want to build and/or defend a nation. It’s like a small catboat. You can have a really great sailing trip with it – but only as long as the weather is nice and the sea is calm.

Christian:
Classical liberals are not anarchists. They believe in self defense.
And just because Roosevelt and Churchill were not pure classical liberals does not mean they were not on that end of the historical continuum.

Three other people did: A conservative egocentric, a left-wing authoritarian populist and a left-wing paranoid psychopathic mass murderer.

If that’s meant to be a description of Churchill, Roosevelt, and Stalin, you’re really 1 for 3. One might also keep in mind that Stalin signed a non-aggression pact with Hitler, so the ‘fast’ and ‘effective’ part requires some qualification.

And just because Roosevelt and Churchill were not pure classical liberals does not mean they were not on that end of the historical continuum.

Churchill shifted back and forth between the Liberal and Conservative Parties. He had more affinity with the Conservatives because of his unapologetic imperialism. Roosevelt was an improviser with mid-career tendencies toward corporatist (though not precisely mercantilist) policies.

So you could conclude that classical liberalism is a really nice ideology but only during really save times. It’s not the best ideology in times of deep crisis and when you want to build and/or defend a nation.

I think you’re confusing the impulses of ‘classical liberalism’ generally with the impulses of a roughly liberal political society which had passed through the abattoir of the Great War. The competing powers in 1914 were as liberal in their politics (though not their social mores) as any set of competing powers has ever been. In certain respects, it’s been all downhill since 1914.

Let’s make it easy then. Anybody who ever achieved anything in history is “actually” a liberal. Anybody who failed is something else. Let’s count in Augustus and Napoleon on the liberal side, too. And according to Art Deco Wilhelm II, Nicholas II and Franz Joseph I also.

And according to Art Deco Wilhelm II, Nicholas II and Franz Joseph I also.

Uh, no. What I said was that the six principles in the Great War were as liberal as any set had ever been, not that they’d all qualify as liberal on an Anglo-American or Latin American spectrum. All three were constitutional monarchies (Russia more insecurely and tentatively than the other two) which encompassed systems of private enterprise. Russia was incrementally replacing feudal land tenures with allodial tenures which could be readily traded in factor markets, a task the Hapsburgs had largely completed by 1860. But, of course, they were executive monarchies, not in the least anti-clerical, and incorporated residual orders in society. Napoleon ran an authoritarian state, but one in which the law and administrative apparat had been rationalized, the land tenures rendered allodial and salable, the titles reduced to mere courtesies of address, the Church rendered a mere corporation. Asked to summarize his social policy, he said ‘careers open to talents’. His was a bourgeois order to which liberal practice could be readily adapted.

“It happened because our forefathers were braving the unknown, discovering new lands, unveiling entire continents, mastering the arts of trade and war, creating new empires, carrying out their mission — “to teach the ways of peace to those you conquer, to spare defeated peoples, tame the proud” while the Asians were stagnating.”

-Japan was likely experiencing genetically rising IQ at the time, and was advancing, though not very fast. Japanese settlements were also found throughout Asia South of China and Japanese pirates and mercenaries were notorious at the time of first European contact. They would have probably explored Africa and Europe if they thought it was worth it. Of course, they didn’t think it was.

“Usually, the “accidents of history” the promoters of HDB think are illustrative of their favorite racial hierarchies are even less meaningful.”

-? Give one example.

“Also, the Founders never intended Asians to be citizens.”

-That’s because they had no experience with them. Were America 5% Chinese at the founding, they would have gotten citizenship, too.

“The Khalidi tape? LOL Hasbara Art has descended into Sean Hannity territory. And how outrageous of those Iranians to have a nuclear program without the approval of the US and Israel. What nerve!”

Good question. Apparently lots of white Americans don’t know and don’t care about what happens outside their little enclave. That’s their right, but I’m not sure that’s something they should want to brag about in my comment section.

Negation, I suppose revenue tariffs might be needed in very primitive societies.

Scott,
I am glad that you wrote this post. I also found Noah’s arguments to be rather unconvincing. I think Noah’s notion that trade with poorer countries is somehow less desirable is particularly invidious.

Noah failed to weigh costs of adjustment for displaced workers versus the benefits of less expensive consumer goods (which disproportionately benefits those with lower incomes). It is also worth pointing out that the U.S. tends to retain the higher value-added portions of the production process.

I wish that Noah would stick to topics that he is knowledgeable about, like behavioral finance, rather than venturing into areas where he has not yet developed much expertise.

“If that’s meant to be a description of Churchill, Roosevelt, and Stalin, you’re really 1 for 3. One might also keep in mind that Stalin signed a non-aggression pact with Hitler, so the ‘fast’ and ‘effective’ part requires some qualification.” — Art Deco
America sold its European friends to Hitler and only fought after the Nazis and their Japanese allies made it impossible to do otherwise.

“And you determine your doctor is ‘competent’ just how? You’ve got three methods: check his certifications, ask around about him, or ask yourself if he’s perpetrated any disasters.”

Art, looks like you correctly answered it for yourself. None of your criteria for “competence” suggested to assign a negative for being a bastard or a positive for speaking your language.
I wonder if the day someone walked into a meeting at Real Madrid and said, “hey we can get this Zidane guy to sign”, if someone asked, “but can he speak Spanish”?

None of your criteria for “competence” suggested to assign a negative for being a bastard or a positive for speaking your language.

It does not seem to occur to you that ‘competence’ to perform discrete tasks would not be the only thing you’d look for in a physician nor that my point was that the capacity of the patient to judge technical competence approaches nil. They can tell when a doctor doesn’t listen to them worth sour apples.

America sold its European friends to Hitler and only fought after the Nazis and their Japanese allies made it impossible to do otherwise.

What are you talking about? Countries do not have ‘friends’, this country’s foreign policy was typically neutralist regarding intramural European rivalries, Britain remained the world’s leading power as late as 1939, and we had only a modestly-sized military when the war broke out.

“Japan was likely experiencing genetically rising IQ at the time, and was advancing, though not very fast. Japanese settlements were also found throughout Asia South of China and Japanese pirates and mercenaries were notorious at the time of first European contact. They would have probably explored Africa and Europe if they thought it was worth it. Of course, they didn’t think it was.”
So what? Italy was suffering from pirates since before Julius Caesar’s time. The Japanese were a millenium-and-half late.

“Usually, the “accidents of history” the promoters of HDB think are illustrative of their favorite racial hierarchies are even less meaningful.”

The habit of cherry-picking is obvious. Pointing out Africa’s disgraces and forgetting Asia’s centuries of war lords, tyrants and chaos (China essentialy has had three good decades out of the last haf-millenium). No matter how well India students fare in the USA, India still can’t teach its people to read and fares worse at the International Mathematics Olympiad than academic powerhouses such as Brazil and Colombia. Pre-Industrial Revolution Jesuits pratically had to introduce sciences like Astronomy and Mathematics (Landes had a field day with people who try to compare Ancient China’s Mathematics with the West’s) to Japan and China.

“That’s because they had no experience with them. Were America 5% Chinese at the founding, they would have gotten citizenship, too.”
Jews are not 5% of America’s population, but people have plenty of experience with them, and developed stereotypes concerning business acumen and academic sharpness. In fact, the more American countries had experience with Asian immigrants, the more they wanted to banish them: USA’s Exclusion Act; in Brazil, sooner than half a century after Japanese immigration (the main Asian immigration to Brazil) started, there was an attempt to outlaw Japanese immigration. Only, decades later when America got “enlightened” in the 60s, Asian immigration was favored again in the USA.

Good question. Apparently lots of white Americans don’t know and don’t care about what happens outside their little enclave. That’s their right, but I’m not sure that’s something they should want to brag about in my comment section.

Do you really fancy that blacks America is amply populated with readers of Foreign Affairs, Far Eastern Economic Review, and India Today? Do you fancy these publications sell well in East LA?

“What are you talking about? Countries do not have ‘friends’”
Your leaders say otherwise and have sai for decades now.
“… this country’s foreign policy was typically neutralist regarding intramural European rivalries, Britain remained the world’s leading power as late as 1939, and we had only a modestly-sized military when the war broke out.”
And Stalin barely had a working Army (his own fault mainly, but still) as his little Finnish adventure showed. So what? America, like the Soviets, only fought Hitler after his greed left them with no options. Nothing like “fast and effectively” at all.

You mean the way America’s “modestly-sized military” crushed the Natives, conquered the Philippines and bullied the Japanese into accepting trade (all that before WW I, not to mention WW II)?
I guess Hitler’s Germany was a little more dangerous than Finland and Poland (or the Lakota People and the Philippines). Who would have thought so?

Why you’ve elected to make yourself Stalin’s press agent on this thread, only you know.

Normal people can look at the map and see that contriving an expeditionary force might be something of an undertaking for a country which ordinarily spends about 1% of its domestic product on its military. Normal human beings can also see a distinction between non-involvement in political struggles across the ocean on the one hand and signing a co-operative agreement with a gruesome military power and then jointly despoiling a neighboring state because you can.

And Brazil’s contribution to order and decency in this world in 1942 was diddly/squat.

I think its unclear how trade with poorer countries shakes out. I’m skeptical about protectionism, in general. However, I find this universal utility maximization outlook strange. It’s clear that group nepotistic strategies dominate in long term games of competition, plenty of simulation studies show this. Western countries go around acting like the whole world shares their post-war universalism (utility in country A is just as valued to us as in our own country) when reality couldn’t be further from the truth. Were America in China’s position cira 1990, China would have exploited our weakness to the maximum, as they tend to be shockingly ethno-nepotistic and protectionist, making Trump look like Justin Trudeau. America will be forced to drop the universal moral signaling act as China rises and the costs of the globalist peakcock’s tail become ruinous; we’re the only one’s playing by the rules.

“Why you’ve elected to make yourself Stalin’s press agent on this thread, only you know.”
Why you are defending the legacy of American Nazi sympathizers is beyond me. The truth is, only the British fought Hitler “fast and effectively”, for some values of “effectively”. Stalin tried to profit all he could from Nazi mischief and strong pro-Nazis sympathies paralyzed all American attempts to face Hitler (even today, many on the far-right say that red Keynesian Roosevelt tricked the peaceful Japanese and the Nazi lamb into war with the USA). The Communists also agitated against fighting the Nazis, but after June, 1941, they became hawks and not even the excuse of pacifist “Communist infiltration” was left. American leaders were glad enough to see a Nazi victory in Europe.
“Normal people can look at the map and see that contriving an expeditionary force might be something of an undertaking for a country which ordinarily spends about 1% of its domestic product on its military.”
It got a lot easier after December, 1941 (even with the sinking of a good chunck of America’s Navy, as soon as January, 1942, there were American soldiers in Europe to fight against their former Nazi friends– the war was two and one-half old by then). I guess revenge is a better motivator than basic human decency after all.
“a co-operative agreement with a gruesome military power.”
I guess the European Jews would be hard-pressed to tell you the difference.
“jointly despoiling a neighboring state because you can.”
I guess dispoiling non-neighboring states is more like the American way, although there is also the occasional Mexican exception.
“And Brazil’s contribution to order and decency in this world in 1942 was diddly/squat.”
This is not so. In this same year, taking the cue from the Soviet Union and the United States, Brazil, too, after years of profiting from the Nazis and supporting their aims, decided to do the right thing, and declared war against Germany. The rest is history.

Why you are defending the legacy of American Nazi sympathizers is beyond me.

There were no Nazi sympathizers, bar the German-American Bund. They had no influence. Charles Lindbergh was a Germanophile much of his life (before 1933 and after 1945), but that wasn’t what was driving the America First Committee. Neutrality was the policy favored by north of 80% of the public in 1938, almost none of whom were ‘Nazi sympathizers’.

The rest of your post reads like it was written by someone who was intoxicated.

“There were no Nazi sympathizers, bar the German-American Bund. They had no influence. Charles Lindbergh was a Germanophile much of his life (before 1933 and after 1945), but that wasn’t what was driving the America First Committee. Neutrality was the policy favored by north of 80% of the public in 1938, almost none of whom were ‘Nazi sympathizers’.”
It is so silly as saying there were no Communists in the USA.
“Charles Lindbergh was a Germanophile much of his life (before 1933 and after 1945).”
And, more importantly, up to December, 1941 as happened to many Americans. This is why “contriving an expeditionary force” was “something of an undertaking” before January, 1942, but not an issue after that.

Saying there were not Nazi sympathizers is as silly as saying there were no Communists in the USA.
“Charles Lindbergh was a Germanophile much of his life (before 1933 and after 1945)”
And from 1933 to 1941, as happened with many other influential Americans. This is the sole reason for “contriving an expeditionary force” being “something of an undertaking” from 1939 to December, 1941, but not an issue from January, 1942 on.

Saying there were not Nazi sympathizers is as silly as saying there were no Communists in the USA.

The German-American Bund existed for five years, had at its peak around 25,000 members, had no influence over any other institution, and was suppressed through a series of criminal prosecutions. The Communist Party was a significant force for 25 years and, with cooperating parties, controlled 12 unions and had people in consequential gatekeeper positions in the publishing business and the film business. The Vice President of the United States was an ally at one point, as were several members of Congress. Hundreds of party members infiltrated federal agencies and passed secrets to Soviet Russia, among them members of the Roosevelt subcabinet. Its membership peaked in 1947 at 100,000.

-Aw; come on, Thiago, that’s because Japan is further from Korea (much less China) than Britain is from France. And Japan had to transition from hunting and gathering much later than did Italy.

“Pointing out Africa’s disgraces and forgetting Asia’s centuries of war lords, tyrants and chaos (China essentialy has had three good decades out of the last haf-millenium).”

-Come on, Thiago. Taiwan. The Malaysian Chinese. Hong Kong. Singapore. The Chinese minorities in SE Asia. Chinese are good at making first-world countries. Blacks are not. The problem with the Chinese is a highly variable level of corruption and social trust (much like Mestizos have a highly variable homicide rate).

Yes, you’re right Koreans and especially Chinese do not seem to have the same high level of initial social cooperation as Japanese. This may have been due to the broader application of the death penalty in Old Japan; maybe due to different family structures.

“No matter how well India students fare in the USA, India still can’t teach its people to read”

-That’s due to low average Indian IQ.

“and fares worse at the International Mathematics Olympiad than academic powerhouses such as Brazil and Colombia.”

-That’s where their comparative advantage is not. The abundance of smart Indians in America shows its best people are fully able to compete with the best people in Brazil and Colombia (which also have large standard deviations in intellectual knowledge).

“Pre-Industrial Revolution Jesuits pratically had to introduce sciences like Astronomy and Mathematics (Landes had a field day with people who try to compare Ancient China’s Mathematics with the West’s) to Japan and China.”

-That’s due to a much more government-dependent and stagnant Chinese intellectual culture.

“When the Japanese attacked Pearl Harbor, the America First Committee dissolved and Lindbergh enlisted in the military.”
Exactly. After Hitler declared war to the USA, sending soldiers to Europe was not “something of a undertaking” anymore. Before that, for two-and-a-half years, American leaders were only too happy seeing Hitler conquering Europe. Nothing “fast or effective” about it. Nazi sympathizers, Charles Lindberhg (a Cross of the Order of the German Eagle recipient) among them, did all they could to prevent the USA from fighting the Nazi regime.

“Aw; come on, Thiago, that’s because Japan is further from Korea (much less China) than Britain is from France.”
The distance the Japanese traveled were not bigger than the distances involved in ruling the Roman Empire. Not to mention the distances between Europe and America, Europe and Asia, Europe and Southern Africa. It was Southern Europeans sailor who opened those ways, it was Southern European priests teaching the Asians.
“And Japan had to transition from hunting and gathering much later than did Italy.”

Because they were backward before they were handed Civilization on a silver plate. Southern Europeans had created complex societies and sophisticated cultures much before the Japanese created any culture of lasting interest. The moral and intellectual superioriy of Southern European stock is unmistakable and overpowering.
“Come on, Thiago. Taiwan. The Malaysian Chinese. Hong Kong. Singapore. The Chinese minorities in SE Asia. Chinese are good at making first-world countries. Blacks are not. The problem with the Chinese is a highly variable level of corruption and social trust (much like Mestizos have a highly variable homicide rate).”
I don’t think human history, not to mention human genome, started in the 1970s.
“That’s where their comparative advantage is not. The abundance of smart Indians in America shows its best people are fully able to compete with the best people in Brazil and Colombia (which also have large standard deviations in intellectual knowledge).”
If you have one billion-plus whateverians is no wonder you can find a handful that can stand over their hind legs.
“That’s due to a much more government-dependent and stagnant Chinese intellectual culture.”
African countries are also stagnant and government-dependent! What is high IQ good for if not for providing right answers and social progress? How can we explain centuries of stagnation, even retrogression (China came from pioneering cannons to having none and depending on Portuguese instructors)?

“The distance the Japanese traveled were not bigger than the distances involved in ruling the Roman Empire.”

-Not comparable. The Mediterranean is not like the Tsushima Strait.

“I don’t think human history, not to mention human genome, started in the 1970s.”

-Agreed, but information since the 1970s should still tell us something about the human genome.

“Southern Europeans had created complex societies and sophisticated cultures much before the Japanese created any culture of lasting interest.”

-And Peruvians built cities before any in Greece. So?

“The moral and intellectual superioriy of Southern European stock is unmistakable and overpowering.”

-By all measures, typical Spaniards and Italians (especially South Spaniards and South Italians) are some of the least intellectual people in capitalist Europe.

“If you have one billion-plus whateverians is no wonder you can find a handful that can stand over their hind legs.”

-OK; point taken.

“African countries are also stagnant and government-dependent!”

-Nope; they have the Internet and a free press these days. No. necessary to become a civil servant to show everyone you’re smart (as was the case in China).

“How can we explain centuries of stagnation, even retrogression (China came from pioneering cannons to having none and depending on Portuguese instructors)?”

-Cannons were developed during Southern Song and Mongol times. The first cannons were developed under the Southern Song to defend against the formidable threat of the Jurchens. The Mongols were some of the most violent and militarily innovative people in all world history. By the early 19th century, China’s military was degraded due to lack of substantial military competitors and the Mongols now being easy to defeat. Meanwhile, Europe had a lot of kingdoms and lots of military competition, both naval and on land.

“By the early 19th century, China’s military was degraded due to lack of substantial military competitors and the Mongols now being easy to defeat. Meanwhile, Europe had a lot of kingdoms and lots of military competition, both naval and on land.”
How hard can be transmiting knowledge down the generations? America, the sole superpoewer, does it. Not to mention that China was conquered by the Mongols and the Manchus and let the Vietnamese break free from its control. Even, in the 1970s, China was unable to conquer Vietnam. Compare with the superior performance of the Japanese fascists.
“-And Peruvians built cities before any in Greece. So?”
Indeed. How could it be?

” By all measures, typical Spaniards and Italians (especially South Spaniards and South Italians) are some of the least intellectual people in capitalist Europe.”
They must be measuring it wrong. We are talking about the people of da Vinci, Cervantes, Lope Vega, Dante, Virgil, Julius Caesar. When the world was a shroud, they were the sole lighthouse.

“Nope; they have the Internet and a free press these days. No. necessary to become a civil servant to show everyone you’re smart (as was the case in China).”
The state still is the supreme dispenser of gifts (this is why people fought so fiercely for control in China and fights in Africa). African countries are reliably present at the bottom of the Reporters Without Borders index (exceptions like Cabo Verde and South Africa are decently working states). It shouldn’t matter, China and Vietnam also make the bottom of the index. African countries still didn’t find the dictatorship that works for them (China and Vietnam only found theirs after 1980– when African socialism was failing, so was China and Vientam’s). It takes time, it took China centuries and centuries.

“Not comparable. The Mediterranean is not like the Tsushima Strait.”
You can’t compare an Empire that sreches from Portugal to Judea, from England to Tunis with the distance between two countries that shared a World Cup. The Japaneses’ ancestrals probably got there from China and Korea in the first place. Now, I would like to see Israel and Italy sharing a World Cup. Or England and Tunisia.

“It does not seem to occur to you that ‘competence’ to perform discrete tasks would not be the only thing you’d look for in a physician”

No, If it’s not serious and she is hot…

“They can tell when a doctor doesn’t listen to them worth sour apples.”

Maybe they are doing you a favor. According to some Dr. Berner (I pass no personal judgement on how competent her opinion is??) “one of the underlying causes (of misdiagnosis) is… physicians typically generate hypotheses almost immediately upon hearing a patient’s initial symptom presentation….often without full exploration of other possibilities,”

So maybe it’s best to point to where it hurts and then say nothing???

Art, What interests me, is that from the first response I ever read of yours I have felt that you to have the most effective writing skills of anyone on this blog, so maybe communication has always, and always will hold a certain level of “weight” to you in all your decision trees.

I on the other hand usually communicated like an angry camel and then expected everyone to tolerate it based on having been hired to be an angry camel. If competency ever dropped I knew there would be no shortage of people lining up to make camel burgers. Seemed like a incredibly fun game to me.

“No matter how well India students fare in the USA, India still can’t teach its people to read”

Adult literacy rates in India are about 70%, and 85% among the late adolescent / young adult population. Per capita product in India has trebled in the last 25 years (though it’s still just 1/10th of that in the U.S.). Life expectancy at birth is now 67 years, a level not reached in the United States until 1950. About 42% of young children are underweight; it was 60% 25 years ago. Since the ghastliness of the partition, the country hasn’t suffered generalized political or social violence; just some circumscribed problems on the periphery (in the Punjab, Assam, &c). The homicide rate, at 3.5 per 100,000, is not as low as what’s normal in non-Russian Europe, but it’s satisfactory on a global scale. They’ve managed to maintain parliamentary institutions with scant interruption since 1948. India’s doing alright.

Again, you don’t know what you’re talking about. The Roosevelt Administration favored intervention and arranged for Lend-Lease aid to Europe and the institution of conscription, which went into effect just 4 months after Dunkirk. Public resistance was not due to any ‘happiness’, but to the outcome of the previous intervention in European affairs, among other things.

“Again, you don’t know what you’re talking about. The Roosevelt Administration favored intervention and arranged for Lend-Lease aid to Europe and the institution of conscription, which went into effect just 4 months after Dunkirk.”

Which was wise: one year later America would be under Japanese attack, AND Germany would declare war against the USA (Germany was not obligated to, for the same reasons Japan was not obligated to declare war to the Soviet Union and didn’t). Again, waiting the Axis attack you hardly qualifies as fighting Hitler “fast and effectively”. Except for a few American leaders, Roosevelt among them, who understood that Nazi Germany was a threat to the United States, Americans didn’t care about what was happening to Europe, most Americans certainly didn’t care about the Europeans Jews (America’s own informal numerus clausus in higher eucation was well-known) as long as they could save their own hides and their IBMs and Coca Cola Companies were making money off the Nazis. The American Judas sold Europe to the Nazis.
“Public resistance was not due to any ‘happiness’, but to the outcome of the previous intervention in European affairs, among other things.”
Which shows the public’s very poor evaluation of the Nazist threat, that would be skillfully used by Nazi sympathizers such as the Bund, blaming the “Jew Rosenfeld”, and Lindbergh. Again, if anything, it underscores the aforementioned criticism of liberal democracy (although one can point out that Stalin and his henchmen did not behave better, and “the worst form the government except all the others”, etc.). Again, nothing “fast and effective” about it.

“Adult literacy rates in India are about 70%, and 85% among the late adolescent / young adult population.”
I guess there are African countries in worse shape (although they have not been independent for so long as India).
“Life expectancy at birth is now 67 years”
There are African countries in worse shape.
“a level not reached in the United States until 1950.”
I guess Johnny Applessed and Billy the Kid led rough lives, but I am not sure what it has to do with India.
“About 42% of young children are underweigh”
A shinning success.
“They’ve managed to maintain parliamentary institutions with scant interruption since 1948.”
The Chinese have managed to maintain an implacable dictatorship with no interruption since 1949. It is clearly which one is working and which is not.

I guess there are African countries in worse shape (although they have not been independent for so long as India).

Brazil was in worse shape in 1970, when they’d been independent for 150 years.

I guess Johnny Applessed and Billy the Kid led rough lives, but I am not sure what it has to do with India.

Let’s see. In Brazil, home of the zika virus and homicide rates 5x what they are in Argentina, the life expectancy reached 67 years in… 1993/94, when Billy the Kid and Johnny Appleseed had been dead for 113 and 149 years, respectively.

Which was wise: one year later America would be under Japanese attack, AND Germany would declare war against th

We get it. You’re in love with your own verbiage, even when it has the properties of an alcoholic ramble.

“We get it. You’re in love with your own verbiage, even when it has the properties of an alcoholic ramble.”
As opposed to whitewashing American Nazi sympathies and considering fighting the Nazis two years and a half after they invaded Poland “fast and effective”? Close enough for government work, I guess.
“Brazil was in worse shape in 1970”, which was just 81 years after the last Orleans king was overthrown. I guess there are more cars and nuclear reactors in Brazil today than there were in 1920’s America. It clearly proves the organizational superiority (maybe even the racial superiority) of Brazil, right? The fact remaisn that, today, with today’s technology and knowledge Indian life expectancy is five years shorter than the Brazilian one. The Indian can’t really understand the value of the human life.
“In Brazil, home of the zika”
It is a tropical country, there are outbreaks, but nothing like the tragedy of India. The Indian can’t understand the importance of hygiene. Brazilians are among the peoples that take the most showers.
“the life expectancy reached 67 years in… 1993/94”.
Brazil´s expectancy is 73, which means it has increased about four months every year since 1994.

While I’m undecided on the merits of this argument, and have seen similar arguments from the likes of Brad Delong, there’s something that bothers me about seeing this argument from you. Because it seems to rely on premises that you don’t usually rely on and I kind of suspect you of adopting opportunistically just for this one weird case where they can be used to score points against liberals without thinking more broadly about the implications. And attaching great moral weight to premises you only narrowly apply. I see two such premises. The more obvious is that you’ve endorsed comparing utilities across people, something more libertarianish economists tend to reject. Everyone here seems to accept that free trade is likely not a Pareto improvement but the argument is that surely the gains to the poor and numerous Chinese offset the losses to some (less numerous and better off) American manufacturing workers. If this reasoning is good when comparing people in different countries should we not also use it when making policies that trade off between people living within the same country? In fact a preference for egalitarianism within a country need not be at odds with a preference for reducing poverty globally — many here have noted that poor/lower-middle-class Americans are disproportionately likely to buy cheap Chinese-manufactured goods, while better off Americans may prefer to buy higher quality, higher cost goods manufactured in richer countries. If we had made taxes more progressive, American consumers would spend more on goods from relatively poor countries, and “the best thing that ever happened” would be happening more quickly, possibly in more countries, right?

This leads into the less obvious of your premises, but the story you are telling here is very demand-side, and we’re not just talking about aggregate demand as a cyclical issue relevant in recessions, we’re talking about a huge economic transition resulting from having access to an external source of demand; from having access to another country’s customers to buy what your own people can’t afford. Are you sure that with the right policies China couldn’t have gotten the same results manufacturing goods for themselves? While you stated a much narrower conclusion, where your argument really leads is that is that it is morally indefensible to be rich and not go shopping. I’m not convinced that’s incorrect but I don’t find it obviously correct and I see no reason to accept the logic of your argument as far as it leads to your conclusion but no further.

“The more obvious is that you’ve endorsed comparing utilities across people, something more libertarianish economists tend to reject.”

I’ve been consistently utilitarian since I started blogging in 2009, and I’ve done many posts defending utilitarianism.

You said:

“If we had made taxes more progressive”

I’m fine with making taxes more progressive, but they should be progressive consumption taxes, that’s my point.

I think that China could have developed without exporting to the US, but more slowly. My argument is not at all demand side, BTW, I think you have misunderstood the argument—it is supply side. The rich don’t have a moral obligation to going shopping, indeed saving is the more altruistic decision by the rich. Shopping by the rich redistributes consumption away from the poor and toward the rich.

My concerns about your consistency may be unfounded, then. But as to whether trade has benefitted China mainly through supply side or demand side effects — I’m not aware of the argument that this is supply side. If China’s development was supply constrained, why have they been running a trade surplus all this time? And why does trade policy focus on import tariffs? From a supply-side perspective, the only country hurt by US import tariffs on Chinese goods is the US — we lose access to cheap Chinese goods. They don’t make it harder for China to buy US goods. They don’t make it more expensive to invest in China. The only way China would be harmed by higher US tariffs on Chinese goods is that they lose some of the demand provided by American consumers — which would also happen if Americans started shopping less. So I really don’t see how one makes an argument for a moral obligation to have low import tariffs that isn’t also an argument for a moral obligation to shop. Am I missing an effect? And of course there’s more to trade policy than US import tariffs, but it’s our import tariffs that Trump is threatening to change and I am guessing you believe our import tariffs in and of themselves are of some consequence to China?

Of course it’s supply side. The economic theory of long run economic growth is a 100% supply-side theory. Demand shocks only matter until wages and prices adjust, which is not very long in China. The EC101 argument for free trade is a 100% supply-side argument.

You said:

“They don’t make it harder for China to buy US goods.”

The EC101 theory of trade says that US tariffs do make it harder for China to buy US goods

“The EC101 theory of trade says that US tariffs do make it harder for China to buy US goods.”

On further reflection I realize I was not considering the effect that tariffs have on exchange rates, which I assume is what you’re referring to here. So an import tariff would affect both imports and exports, it would just affect imports more than an export tariff would and would affect exports less. But that still leaves the question of why countries prefer import tariffs over export tariffs if the effect is primarily supply side. It seems that if for some reason we wanted to punish China in retaliation for some perceived unfair trade practices, from a supply-side perspective we should do so with export tariffs, which would hurt their ability to buy our stuff more than it would hurt our ability to buy theirs. But trade wars have been primarily conducted with import tariffs. So that doesn’t necessarily demonstrate that the demand side matters, but there sure is a long history of countries acting as if it does. And empirically a supply-side story just doesn’t fit China very well — if they were previously constrained by their ability to buy American goods, then I would expect that when trade barriers were lifted we would first see a surge in Chinese imports, with exports surging later as more factories get built. Instead we see that free trade allowed them to run large trade surpluses.

From a theoretical standpoint I don’t think it should be hard to justify demand-side considerations having an impact on long-term growth if you believe that economies of scale play a role in driving growth. For example, it’s more worthwhile to invest in improving manufacturing efficiency if you are selling to both the Chinese and American markets than if you are selling to just one. But then for the same reason is less worthwhile to make those investments if Americans get thriftier.

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Welcome to a new blog on the endlessly perplexing problem of monetary policy. You’ll quickly notice that I am not a natural blogger, yet I feel compelled by recent events to give it a shot. Read more...

Bio

My name is Scott Sumner and I have taught economics at Bentley University for the past 27 years. I earned a BA in economics at Wisconsin and a PhD at Chicago. My research has been in the field of monetary economics, particularly the role of the gold standard in the Great Depression. I had just begun research on the relationship between cultural values and neoliberal reforms, when I got pulled back into monetary economics by the current crisis.